High humidity is OK for a few days, while you are sprouting seeds and waiting for them to emerge from the soil. The humidity keeps the soil surface from drying out, which always tempts me to over-water. I think that SMART seed-starters get their sterile medium BARELY damp before putting it in small pots or trays. Like a wrung-out sponge. Damp, not wet. And soggy is much too wet.
However, as soon as any seedlings start to emerge, they want drier air and you have to remove humidity domes or plastic film.
>> a layer of what looks like mold growing
That does sound WAY too damp, if it really is mold.
Even a little mold at the soil surface is prone to attack very young stems. If a seedling with just a few leaves falls over like a cut tree, with a limp "broken neck" right at the soil surface, you probably have "damping off". There are many suggested prevention methods, some of which probably do help. (Cinnamon powder, watering with Chamomille tea instead of water, and misting or watering with 0.1% hydrogen peroxide instead of water). I doubt there is any cure.
The best prevention is to remove any conditions that favor damping off.
1.
Give them dry air, not humid air, AS SOON AS the seedling emerges (it is most vulnerable then). A small fan is a big help. Stagnant air seems to favor the damping -off fungi.
2.
I think the biggest factor is how damp the SURFACE of your soil mix is. The seeds and roots do need water, but the surface should dry off ASAP. Clever seed-starters learn how not to over-water. I keep hoping I will learn one of these years. Sometimes I lay a capillary mat like cotton flannel on the bottom of the tray and bottom water instead of watering from above.
The easy way to assure a quickly-dry soil surface is to spread a little coarse Perlite on top, which drains fast and dries quickly. I like a top layer of bark nuggets or shreds (as coarse as fit easily into the pot or cell). Or grit or crushed rock (like 3-4 mm grains). Some top-dress with "coarse" sand, but it has to be coarse enough and "sharp" enough not to hold water with capillary action. In my book, any sand that coarse isn't sand, it's grit!
2.5
P.S. This next one isn't really about damping off, it's about baby roots drowning.
Roots need to find air (oxygen) in their soil mix or they drown just like we do. If the mix is too fine (like pure milled peat moss), it will hold as much water as you give it -
displacing the air and blocking the voids and tiny channels that air would otherwise have diffused through.
That's why most people add Perlite to c heap commercial mixes and I add relatively coarse bark. Coarser texture creates more air voids and lets water drain OUT so that air can diffuse IN. really pricy professional mixes have higher porosity than cheapo peaty mixes. (Or maybe you can learn to avoid ovewrwatering ... I haven't learned it yet.)
Drowned roots = dead seedlings. DrownING roots = sickly, slow-growing seedlings. Less air penetration means anoxic soil or hypoxia: anaerobic bacteria and fungi favored over the (usually more desirable) aerobic microbes. Everyone says that seeds need water to germinate ... actually they need plenty of oxygen and JUST ENOUGH water.
3.
Healthy vigorous seedlings that are growing as fast as possible for the first few days seem to get past their period of vulnerability before the damping off fungi c an establish themselves.. I THINK that is why bright lights seem to reduce the amount of damping off. Seedlings need full brightness as soon as they emerge. Someone claimed that seedlings need brighter light than adult plants!
Or maybe bright light bleaches the fungi, or heats and dries the soil surface. Or it encourages algae which suppress the fungi! Who knows?
4.
The soilless mix should be as clean as practical. We call it "sterile", but it isn't sterile as a nurse would use the term. If you do save any unused seed-start mix from year to year, at least cover the bag tightly and keep it dry. Dust or a dirty trowel carries in fungal spores. Keep it clean, as a nurse would define "clean". After all, it will be the swaddling clothes for your vulnerable new-born plants.
DAMP mix starts to ferment, usually anaerobically or with low O2 levels. First, that creates alcohols and acid (fermentation products) which are low-level root toxins. Then the "sterile" mix collects huge numbers of the worst microbes for seed-starting: anaerobic fermenting microbes.
Don't re-use used mix to start seeds! Use it as potting soil or to lighten a raised bed. For those purposes, it is like gold, whereas for seed starting, once-used mix is like putting a dirty diaper back on a baby.
Some brave souls start seeds in garden soil they have sterilized! For some reason seedlings have fewer problems with damping off when started outdoors. Indoors, soil or organic compost contain and also tend to attract flies and fungus and mold.
Others sterilize their seedling flats, pots and trays with Clorox or Hydrogen Peroxide.
Some recipes are:
Sterilize pots and trays with household "REGULAR" Clorox diluted 1:9 or 1:10. Start with REGULAR Clorox which is 5% - 10% Sodium hypochlorite.
Never water with this!
Just use it to sterilize clean pots or trays, then rinse after sterilizing.
"Non-chlorine bleach" is something else that does not sterilize.
You can discourage fungus and add a little oxygen to soil by misting or watering with very dilute hydrogen peroxide. Start with household peroxide (3% H2O2).
1 ounce per quart (one ounce is 2 tablespoons) or
1/2 cup per gallon.
Other people suggest using it stronger - perhaps as much as 3 times stronger. YMMV.
Or buy a big jar of cinnamon powder, and dust the soil surface with that before sowing.
Or water with Chamomile tea.
But my suggestions are:
1. Soil surface is usually dry.
2. Soilless mix must DRAIN WELL and be clean
3. use bright lights and foster fast-growing seedlings
4. air is not too humid, preferably moving air after watering and a few other times per day.
(If you already have some food grade peroxide, it is around 35% instead of 3%, so use 1/10th as much! Like 2-6 teaspoons per gallon)
http://www.using-hydrogen-pero...
Ive moved my seedlings that are out of domes upstairs.
Resist!!! 
Ken
